July 03, 2007
Death of a Gimmick
SACRAMENTO -- A gimmick used to help balance Gov. Arnold Schwarzenegger's first three state budgets died when his administration decided not to appeal a court decision Tuesday blocking a pension bond.
His first budget in 2004 proposed issuing a $929 million bond to make part of the state's annual pension payment, arguing that voter approval of the debt was not needed because the pension payment is an "obligation imposed by law."
A taxpayer group, not buying the argument, got the courts to block the bond. The next two state budgets assumed that the state would prevail on appeal and issue a pension bond, eventually scaled down to $560 million.
The mythical revenue from a bond issue unlikely to be approved by the courts, as nonpartisan Legislative Analyst Liz Hill noted, was nonetheless used to help the spending plans appear to be balanced.
A lower court ruling blocking the bond issue was upheld Tuesday by the Third District Court of Appeal. The decision not to appeal was foreshadowed earlier this year when the fourth budget proposed by Schwarzenegger assumed no pension bond.
"This is a great Fourth of July gift to Californians," said Harold Johnson, a Pacific Legal Foundation attorney. He represented the Fullerton Association of Concerned Taxpayers.
Ed Mendel has a blog? Excellent news!
He’s one of the only California reporters that sees straight on fiscal matters, IMO.
And here I thought the SDUT only had the nasty Chris Reed as a blogger!
Thank you! I need to check that out.
Welcome to FR!!!